Quarterly review of govt performance: Narendra Modi Meter 8.5/10

Sep 01 2014, 12:16 IST
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The government also fought hard at the WTO summit against trade facilitation agreement (TFA) to protect farmers and India’s food security. (AP Photo) The government also fought hard at the WTO summit against trade facilitation agreement (TFA) to protect farmers and India’s food security. (AP Photo)
SummaryEconomic growth and improving ‘ease of doing business’ remain Narendra Modi govt’s focus areas.

Reflections of last 90 days: We start a quarterly review of the performance of the new Indian government. We have devised a performance metric based on (i) Economics, (ii) Foreign policy, (iii) Governance and (iv) State relations/ Parliament productivity/Politics. Based on this metric, the government has scored a healthy 8.5 out of 10.

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The key focus area remains Infrastructure and growth, and our top three ideas are L&T, ICICI Bank and Axis Bank.

Impact

Economics–8/10: Economic growth and improving the ‘ease of doing business’ remain the key focus areas. Special emphasis on infrastructure projects was visible in the budget; funding norms have been eased; FDI has been liberalised and ‘Make in India’ (manufacturing) is the new mantra. The reforms being pushed by the BJP government in Rajasthan on labour, land and subsidies do make for a strong start. What fell short of expectations was delay in gas price hike, no commitment on time line for GST (goods and services tax) and half measures on FDI in defence.

Foreign Policy–10/10: Calling Saarc leaders for the swearing in ceremony was a masterstroke, and it was followed by a visit to Nepal, Bhutan and Myanmar to underscore the good relationship with neighbouring countries.

The government also fought hard at the WTO summit against trade facilitation agreement (TFA) to protect farmers and India’s food security and also played

a strong role in creation of the new BRICS Bank

Governance – 8/10: The government has made a good start by downsizing the Cabinet - Narendra Modi cut down on the number of posts and departments and inducted young ministers into important ministries. He also laid out a 10-point agenda for the ministers to build confidence in bureaucracy, bring transparency into government and ensure stability in government policies while promoting growth. The government also launched a website named—www.mygov.nic.in—to encourage citizens’ participation in the governance process.

Parliament productivity/politics /state relations 8/10: The NDA government’s recently concluded Parliament session could be considered fairly productive with least amount of hours lost due to disruption compared to the UPA government’s record. However, non-passage of the Insurance Bill, which sought to raise the FDI limit to 49%, in the Rajya Sabha, where the BJP does not enjoy a majority, disappointed markets as it raised doubts around how the government would manage passage of other bills through a hostile upper house for the next couple of years.

Outlook

Market ready for a new high:

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